the hindsight Crystal ball thread

Investment Analysis Clubs Where Angels Fear to Tread
1

On Jan 1st I wrote:
"How will Saul do in 2022? My guess is “very well”. But I think DDOG and NET may be the 2022 versions of CRWD, in that the companies will continue to execute but may suffer under the weight of their still-expensive mkt caps. I think MNDY can/will probably go on a run, but I would pocket any big gains, as I don’t see the mission-critical nature of their offerings. S may do well, and could easily double when you “compare” them to the still-sizable CRWD mkt cap, but that is misleading, as CRWD probably is still overvalued. But until market vomits due to rate hikes/Fed, S may be an early 2022 momentum winner. Especially if we get a decent-sized security news-worthy incident to hit, which is possible at any time. UPST could go on another run. Yes, early in their TAM. Can auto ramp during supply constraints enough to offset any slowdown in personal loans? Because I kind of feel like they may hit a big slowdown in personal loans if they don’t start attaching to major banks. But UPST could be another early/big winner in 1H 2022. Saul tends to ride out any corrections vs trading or raising cash in advance, so I think he sees big swings in 2022 as he did in 2021. Just a guess would be a good Q1, probably either Q2 or Q3 goes to hell thanks to Fed, and then resulting bounce out of a measurable dip leads to a great Q4. My other prediction is that we see tons of angst from the 2020-get/got-rich-quick crowd that doesn’t have Saul’s stomach and experience, and who option/leverage themselves into oblivion during any big market tank. They will be fed up as 2021 frustrated and confused them, and they will likely rebel and question everything for a few months.

Why do I care? I don’t really…just always find human psychology to be interesting to watch play out.

Saul’s method works if you can be intellectually honest about it, and have a stomach for volatility. Concept is to invest in growth rates essentially, and that market will allow a premium on stock price/multiple while growth is high/flat or high/accelerating, but that you have to pull the rip-cord if growth trends down before market punishes the stock accordingly. It is not TA, so it is not momentum in that sense, but it is momentum (imo) based not on company’s valuation or long-term prospects, but about their point in the S-curve. This is a variation of the Gorilla Game investing strategies from late 1990s, whether intentional or not."

  1. MNDY - should have pocketed gains and left the building. That checks out so far.
  2. DDOG/NET - suffer under weight of their mkt caps. That checks out a bit so far. DDOG gave back their ER gains already, fyi.
  3. UPST - could go on another run. Yes/no. Stock on Jan 1st was quite a bit higher, but yes they had a nice ER pop and run off the 1/24 lows. Rest of year is TBD, but I think promising in the end.
  4. Saul board angst. This one is off the charts correct.

Regarding #4:
These guys, imo, are just winging it and making up the rules as they go along. I change my mind all the time too, so it doesn’t bother me that they do, but rather that they try to put “absolute statements” and rules in place, as if getting lucky in 2020 thanks to a pandemic made them all stock gurus for life. ZM was the greatest, but got shot because they got all their growth too soon, which shows this is a momentum/trend system and not about owning great companies. CRWD growth slows a tic? Kick em’ out! Ok, fine. Then LSPD and UPST lay eggs, and it is super, like, obvious that it is because they were not SaaS. I mean, like, remember AYX? Same thing! AMPL gets crushed. Uhhh…well…that was different because. Um. Then MNDY, which was, like, super-SaaS-y, gets crushed, and I start to wonder if they will have about 2 stocks to follow the rest of the year after ZS/S/SNOW report. Wait!!! It is about losing money. can’t lose money now. Ok. What about BILL and S, then? Ummm.

Let me fix it all for you, John Candy style…just make it up as you go along, and pretend it is known facts:
https://www.youtube.com/watch?v=j87wE6DyOQA

Dreamer <— should follow his own predictions more often

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Following you on Saul’s board and it does seem like people are taking your comments/observations personnel. I agree with most of your views but also don’t get worked up as easy as I did when I was young.

Always been meaning to do this. Thanks for bringing TTD to my attention!!! Still holding my original shares.

I’m just riding out this downdraft and hoping for an upswing in the future.

zoro

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NostraDreamer won 2022.
Recall that I was actually up 1% or something at end of March.

Then it went to hell in Q2, bled all over the floor in Q3, and made a quiet, but incomplete, comeback in Q4.

I definitely nailed the “tons of angst” part, although it is greatly subdued thanks to the restrictive/exclusive nature of the board since the TMF move.

Otherwise all the pitchfork-wielding distraught followers that bought into the “valuations don’t matter” discourse since 2021 would be wailing in post after post.

That’s how China and North Korea do it. Shut down opposing views and critics.

Dreamer

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Now doubt Saul will tout his still market beating 5 year CAGR in the year-end review.

There was a poll on his board about a year ago, quickly removed, where people were asked if their returns were positive or negative since starting with his method. The majority was negative while the poll was still running. Now it would be even worse.

If you are boarding a momentum train, make sure you are one of the first on board, when valuations are still in the ball park of what is historically reasonable. P/S of 10-20 … ok. P/S of 50-60 with huge market caps … not so much.

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